Are you making the best use of the Tronc?

The 3 common mistakes to avoid when it comes to using Tronc by Matthew Wyatt FCA.

Read on for the three most common pitfalls:

1. Directors/owners being involved in the distribution of Tronc monies

The problem with having a director or owner involved is that the National Insurance saving is lost as tips have to then be treated in the same way as a salary. This can be avoided by having a 'troncmaster' appointed within the company who will deal with the duties of collection, custody and distribution of tips.

2. Deducting monies for breakages or other costs associated with the staff

An employer may decide to retain part of the service charge to cover items usch as credit card charges, breakages, till shortages and administration costs of running the tronc through their payroll. You need to ensure that your policy is communicated to all members of the tronc scheme and that once the deductions have been made, the balance is handed to the troncmaster for distribution to staff.

3. Including tronc payments as part of the national minimum wage

It was confirmed several years ago that no part of the tronc can be used to comply with the minimum wage requirements. It must be ensured that the employer pay the mimimum wage to employees, with the tronc then being classified as over and above this amount.

The content of this post is up to date and relevant as at 02/12/2013.

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